When to Lower Your Price

If your goods is unique and have no direct competition, you may consider lowering your selling price if you think price is the reason why it doesn't move. You may also need to exam if the goods is suitable for the market you are catering to. The price slash will not be useful if the kind of customers your goods is targeting is not available. In that case, you will have to really give a big enough discount to clear it. If there are other competitors, obviously you have to do something if they give out discounts. Even though you may have a good reputation, a good regular customer base, a good shopping environment and competitive pricing, you must always react with any changes in the market. It does not mean that you have to follow 100% of what your competitor is doing. Things you have to find out are: 1. Items that are on offer If the items on offer are just a few SKU, you may follow as it doesn't make much difference in the overall gross profit calculation. By doing that you avoid losing your customers who may be attracted by the discount to your competitor. If the offer is for a whole range of products, you may have to see the duration of the offer to make a decision. 2. The period of the offer If it is just for a short period, you should follow. If it is for a longer time, you may either follow or select some major items from that product range to offer the same or even give a higher discount. 3. The stock quantity of the offer item If their stock quantity for the offer item is low or limited, you can decide to follow or not to as the effect would be minimal. But if it is with many stock, you must follow. 4. The discount given Whatever discount given you just have to follow, unless the item(s) on offer is below cost. In the below cost case, your competitor is either clearing stock or it is determined to pull your customers. What you have to do are: (1) talk to your supplier to ask for support (2) follow the below cost offer even without supplier support (3) think of ways to sell more other profitable products in your shop As for All-Time-Season clothes, the right time to do a sale is when you are over-stock or your stock is not moving. But for creating shopping excitement for your customers, doing a sale in low season is always helpful to stimulate sales.

Hello , as being a business student and also practicing it . I would suggest lower price is not always work . Think if your competitor is big companies , do you think you can compete on price ? try some other strategies like give some exxtra benefits and all that .